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Funding is the mechanism that keeps a perp’s price tethered to its underlying. Periodically, the side of the market trading at a premium pays the side trading at a discount, in proportion to the gap between the perp price and the oracle price. When the perp trades above the oracle, longs pay shorts; when it trades below, shorts pay longs. There is no fee taken by the exchange on funding — it is a transfer between traders.
This page is conceptual. Live and historical funding values are available from GET /v1/markets/funding and the funding WebSocket channel.

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The basic model

The funding rate is driven by the basis — the gap between the perp’s price and the oracle price. A persistent premium produces positive funding (longs pay), which incentivizes traders to close longs / open shorts and pulls the price back toward the oracle; a persistent discount does the reverse. This is the same convergence mechanism used across perp markets.

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Real-world assets

For perps on equities, commodity ETFs, and index ETFs, funding does more than close the basis: it also passes through the events that drive a real holder’s return — dividends, splits, and futures rolls — so the perp tracks the total return of the underlying. Those mechanics are covered on Real-world asset perps.

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Off-hours trading

A key advantage of perps is 24/7 price discovery. But when an underlying market is closed, liquidity and the ability to hedge are limited, so Arcus applies guardrails for RWA perps during those windows:
  • Fixed off-hours funding. Instead of a live, basis-driven rate, funding is locked to a base off-hours rate of SOFR + 0.5%, fixed at the close. This removes funding uncertainty for traders carrying positions overnight or over the weekend, beyond the price of the underlying itself.
  • Higher initial margin. Opening or growing a position off-hours requires more collateral. See Margin.
  • Price bands. Trading and the mark price are constrained to a range around the last regular-hours price, widening only gradually if sustained pressure builds against a bound. This gives the market time to consolidate and helps prevent off-hours liquidation cascades.
Crypto perps have no off-hours regime — funding stays live and basis-driven around the clock.
Regular-trading-hours calendars differ by market, and the precise funding interval, clamps, and band parameters are internal settings. Read live funding from the API rather than recomputing it.